Deutsche Bank on United States 'troubled' list

REUTERS  Ralph Orlowski  File

The S&P downgrade and looming Australian charges come less than 24 hours after the Wall Street Journal reported that the Federal Reserve past year labelled Deutsche Bank's United States arm as in a "troubled condition".

News of the Fed's judgment, handed down previous year but only made public now, was followed by a move from the leading ratings agency Standard & Poor's to downgrade Deutsche's long-term credit rating.

REUTERS/Kai Pfaffenbach A spokesperson for Deutsche Bank told Business Insider: "As a matter of policy, we do not comment on specific regulatory feedback".

Sewing said a series of enforcement actions by the Federal Reserve were principally related to weaknesses in internal controls and infrastructure.

German business newspaper Handelsblatt reported in December that special prosecutor Robert Mueller subpoenaed Deutsche Bank seeking records as part of the investigation into 2016 election meddling by Russian Federation.

In its report, S&P questioned Sewing's ability to deliver on a plan to scale back Deutsche's global investment bank and refocus on Europe and its home market to chart a return to profitability after three years of losses.

Christian Sewing reiterated a commitment to Deutsche's turnaround in his message to staff, saying the bank will prove that it has "earned a better valuation" on the financial markets.

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"As you know, we have made progress in remediating them over the past year", he wrote.

Another lurch downward in its stock price to a record low Thursday smacks of panic among investors. "We're not yet where we want to be, but we are steadily getting there".

Deutsche Bank's new CEO has moved to reassure staff that the bank is in good shape after a tough 24 hours for the troubled German lender. That was one or two notches below most European competitors, with Switzerland's UBS rated A+ with a stable outlook.

"HNA remains committed to Deutsche Bank's long-term success and looks forward to continuing to work with the management team in support of that goal", a spokesman for HNA said.

The Federal Deposit Insurance Corp. has added Deutsche Bank's federally insured US business to a list of banks with weaknesses serious enough to endanger their financial viability, the person said Thursday, confirming reports by the Financial Times and The Wall Street Journal.

Sewing said this month he would reduce global staff by more than 7,000, including 25% of the global equities business.

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